The Morning Brief: Gold Stocks Pop After Testing Lows

September 02, 2016   Stephen Taub


A number of gold stocks surged in price on Thursday, boosting several hedge funds. There is no apparent reason why gold shares did so well, and it may well be a case of buying on the dip, with many of the stocks at one or two-month lows. There was also some speculation that weaker than expected manufacturing numbers may have led some investors to lessen their expectation that the Federal Reserve will raise interest rates, which is good for gold. The price of metallic gold is off more than 3 percent in just the past month.

For example, shares of Toronto-based Kinross Gold surged 4.76 percent on Thursday to close at $4.18. Top-ten holders include East Setauket, New York-based Renaissance Technologies and Greenwich, Connecticut-based AQR, although their positions are not a major part of their stock portfolios. However, Kinross stock is the third-largest U.S. equity long of London-based Odey Asset Management, the 11th-largest shareholder.

Shares of Toronto-based Yamana Gold jumped 5.5 percent to close at $4.25. Yamana explores for gold, silver and copper. AQR is Yamana’s eighth-largest shareholder.

Toronto-based Barrick Gold, which explores for gold, copper and nickel, surged 4.6 percent to close at $17.80. Renaissance is a major shareholder while New York-based Caxton Corp. had a large position in call options at the end of June. The stock is also the second-largest long in the very small U.S. stock portfolio of London-based Sloane Robinson.

Interestingly, SPDR Gold Trust, an exchange-traded fund designed to track the price of gold, was only up about 0.4 percent for the day. New York multistrategy firm Eton Park Capital Management has a major position in the call options on the ETF.

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Shares of hedge fund favorite Charter Communications also enjoyed a strong day. The cable and broadband provider’s stock surged 4.5 percent to $262.82 after it was added to the Standard & Poor’s 500 late Wednesday. Inclusion means the huge amount of capital invested in the S&P 500 had to buy the stock. At the end of the second quarter, at least 68 hedge funds held the stock among their top-ten holdings. Its largest shareholder is London-based TCI Fund Management while other major holders include Greenwich, Connecticut-based Lone Pine Capital, New York-based Tiger Global Management and New York-based Soroban Capital Partners.

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Shares of another hedge fund favorite, Salesforce.com, fell 4.4 percent after the business software maker issued disappointing guidance. At the end of the second quarter, at least 71 hedge funds held a position in the stock.

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London-based Man Group named Brian Broesder and Westin Lovy as managing directors. The pair were previously at South Norwalk, Connecticut-based Bridge Lane Capital, which they co-founded in 2012. They will continue to manage the portfolios of Bridge Lane, which currently has more than $125 million in committed capital, specializing in private debt transactions with small and lower middle-market companies in North America.

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Barington Capital has named Brian Moss as a partner to head up marketing and investor relations. He previously spent ten years at Optima Fund Management. Moss replaces Marjorie Kaufman, who joined the firm a year ago. She remains a partner but will now devote her time to corporate governance, board diversity and active engagement at the New York activist hedge fund firm. Barington is up about 13 percent for the year.


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